A few highlights on SoftMetal trading principals and technology
Before we all wind down for the holidays, we wanted to share some exciting news about the game changing technology soon to be available for the metal industry in 2023.
SoftMetal is a powerful auction-exchange platform that allows multi-element metals, starting with ferrochrome to be bought and sold via secure trading. In a competitive landscape, the platform will provide you with rapid price discovery and a transparent spot price for ferrochrome. As well as enabling the liquidity of complex ferroalloys within a completely transparent environment that leverages Privacy-Enhancing Technologies (PET) to solve the confidentiality and regulatory challenges that classic exchange platforms face.
Our Chief Technology Officer has taken a moment to briefly explain the pioneering technology that is confidential computing, behind this platform. The architecture of SoftMetal is built upon the STTS (Secretarium’s Trading & Tokenisation Suite) framework, where Secretarium are the primary architects of confidential computing itself. Based on a combination of secure hardware, distributed ledger technology and cryptography, the properties of STTS provides users of SoftMetal with:
- the ability to match trading interests anonymously
- the ability to run order book interest matching on a code-is-law basis
- the ability to preserve confidentiality of inventory
- the ability to leverage existing custodians, keep track of certificates of origin, certificates of quality, and ascertain, through custodians that inventory is real
- the ability, through existing custodians to lock the assets, thus making all trading orders firm instead of noncommittal
- the ability to run a continuous auction, based on a loosely defined standard, rather than a constraining one
- the ability to provide you with a tamper-proof spot price, based on all trades and nothing but the trades, no "editorial" touches included
Except for the non-constraining standard, all these properties sound like classical market integrity features, don’t they? Overall, the most crucial element at its core is all about safeguarding price-sensitive information, ensuring it does not leak, and that all market participants are treated fairly. But here, there is a crucial difference with traditional exchanges. Where market integrity properties are generally provided through organisational means (internal controls, segregation of duties and regulation), in the case of SoftMetal, these properties are directly made possible by the technology itself.
As for the loosely defined standard, STTS takes inspiration from Nobel Laureate Paul Milgrom’s auction theory https://www.nobelprize.org/prizes/economic-sciences/2020/popular-information/ and allows the pricing of ferrochrome as an asset class rather than imposing a constraining standard to run matches and price discovery as a listed exchange. The ability to do so without jeopardising liquidity and market integrity is also intimately linked to the properties of the technology itself.
What is game changing about this technology is Secretarium’s usage of PETs within a Trusted Execution Environment (TEE), that allows data encryption in transit and at rest, but more crucially in use, which offers strong protection from eavesdropping. TEEs also enables falsification resistance, which prevents a program or any data to be substituted or altered in any way. This falsification resistant mechanism provides code-is-law properties like that of blockchain technologies.
We hope this explains the general idea behind the mechanisms of SoftMetal and STTS. A series of articles will be published in the new year that will explain more about the platform, auction theory, and how Secretarium’s technology will empower SoftMetal users to trade safely thanks to the underlying technology.
We’re convinced SoftMetal and STTS represent a breakthrough in market organisation and are very excited to see SoftMetal soon to be available on the market.
Keep an eye out in the new year and have a Happy New Year all!